Microsoft is about to admit that working in an office is better for productivity than working remotely. After betting on the future of remote work with Viva, Teams, and even Windows 11, Microsoft is now preparing its headquarters to welcome employees back into the office.

Also this week: Microsoft was ready for GPT-5, GitHub just got less independent at Microsoft, and lightweight Office apps arrive on the taskbar.

Microsoft originally encouraged its employees to work from home amid the coronavirus outbreak in 2020. This new flexible working arrangement then became an official “hybrid workplace” policy several months after the pandemic began, allowing managers to approve permanent remote work. Now that the pandemic has settled into endemicity, Microsoft wants employees to return to the office. And if some quit in response, well, that’s probably exactly what Microsoft is expecting.

Much like Amazon or Google before it, Microsoft is preparing a mandatory return-to-office policy, according to sources familiar with the company’s plans. Rumors of the return-to-office policy first emerged a few weeks ago internally at Microsoft, leading to plenty of speculation among employees. A recent Experiences + Devices all-hands call revealed that Microsoft’s senior leadership team is working on “some guidance” that will be announced to employees in the coming weeks.

I understand that Microsoft is preparing to announce a mandatory return to office of three days a week. The policy will apply to those who live within 50 miles of Microsoft’s Redmond campus, and some teams at Microsoft may even return for four or five days. Those individual team decisions will be made by executive vice presidents, and I understand that employees will also be able to apply for exceptions.

More than half of Microsoft’s 228,000 employees are in the US, and most of that 125,000 are located near the company’s Redmond campus just outside of Seattle, so this policy will affect a lot of Microsoft employees. Business Insider first reported the rumors of a return-to-office policy last week, and I understand it will be announced in September and then implemented in late January. 

On that same Experiences + Devices all-hands call, Microsoft said that employees who spend three or four days in the office have higher Thriving Scores — a metric that measures employee well-being. Microsoft has been increasingly integrating the Thrive Global tool into Microsoft Teams, and using it to gauge how employees are feeling through questionnaires.

Scott Guthrie, executive vice president of Microsoft’s cloud and AI group, told employees last year that the company wasn’t changing its return-to-office policy unless productivity dropped. Microsoft has continued to post impressive earnings results over the past five years, even driving the company to a $3 trillion market cap recently — so productivity clearly hasn’t been a huge issue.

I’ve spoken to dozens of Microsoft employees in recent weeks about the upcoming return-to-office policy, and there’s a real split of opinion on it. Some employees are concerned about a mandatory return, especially given the local road traffic problems and the amount of time lost in travel.

Others are worried about Microsoft not having enough space for everyone to return at the same time, despite the company's $5 billion headquarters expansion. Microsoft has vacated lots of spaces in Bellevue in recent years, including the 27-story City Center building, the two Bravern office towers, and the Advanta campus. It has also given up space in Redmond, in efforts to cut the costs associated with office space that isn’t being used as regularly anymore.

Microsoft's campus renovation includes 17 new buildings to replace 12 old buildings and hold 8,000 additional employees. Seven buildings are now open, with others under construction or on hold. It's still not clear when Microsoft will complete its sprawling campus overhaul, as the company hasn't put a firm end date on construction.

This potential lack of space is already being felt by some employees who are using the office space regularly. Some teams have desks assigned to individuals, and others are hot-desking. One source tells me there often aren’t enough focus rooms for online meetings and some rooms aren’t large enough for bigger meetings. In some buildings, Microsoft has been squeezing in so many employees that they’ve run out of power, I’m told. Despite this, I understand Microsoft is aiming to provide dedicated desks to support employees returning for three days a week.

Other Redmond employees welcome the return-to-office policy, having spent the past few years working in vacant offices with empty cafeterias or half-empty connector buses around campus. I visit Microsoft’s campus regularly every year for product briefings and launch events, and it’s been eerily quiet recently — particularly with the empty, unfinished buildings.

It’s clear to me from talking to Microsoft employees that most will agree that this could be seen as a type of stealth layoff, months after around 15,000 roles were cut. Morale is already at an all-time low inside Microsoft, and if you’re not happy about returning to the office three days a week and you can’t get an exception, then that makes it difficult to continue at the company. It also seems like an easy way for Microsoft’s management teams to weed out “rest and vest” employees that are coasting along.

Microsoft’s return-to-office policy could also shape remote or hybrid working for other companies. Microsoft made a big deal about its hybrid workplace when it started reopening its headquarters, and it also marketed Microsoft Teams on the basis of being a tool that could help with the tension of meetings that include remote and in-person attendees. Before AI became Microsoft’s new focus, it even held a special “Windows Powers the Future of Hybrid Work” event.

A lot of companies followed Microsoft’s lead on remote work, and they may now be looking at its mandatory three-day return and thinking it’s a tacit admission that Teams doesn’t always work for everyone — especially if you’re a junior employee and you need to get face-to-face time with colleagues. Microsoft isn’t going quite as far as Amazon’s full return, or Google’s policy to force some remote workers to come back three days a week or lose their jobs, but it may well help revise a standard that many companies are already following.

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I’m heading to Germany next week for Gamescom, so if you’re at the show please say hello. I’m looking forward to getting my hands on the new Xbox Ally handheld devices, and I’ll have plenty of impressions to share soon.

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